Got questions about membership? Click here for FAQs!

Promoting Quality Higher Education– An Investment in Oregon’s Future

NEWSLETTER, OTHER LABOR NEWS

PERS changes- how they impact you

July 31, 2017 / Phil Lesch

Changes to PERS have a big impact on employer finances. Portland State University shares the impact that PERS has on all public employers, but to a lesser extent. In the PSU-AAUP bargaining unit, as of March 2017 there were 251 faculty members, including academic professionals, were in PERS. This is roughly 19% of the bargaining unit. The rest of the bargaining unit is in the Optional Retirement Plan. 

The reduction of the anticipated earnings rate to 7.2% caused the unfunded actuarial liability (UAL) of the PERS system to increase by an addition $2.4 billion and the uncollared rate increase is 1.9%. This will have no impact on the 2019-21 employer contribution rates as the collar will restrict that rate increase. The collar may restrict the rate increase in the 2021-23 biennium too. Keep in mind that this rate is set as part of the actuarial process of setting employer rates and does not ultimately determine the actual cost of providing pension benefits- that is determined by the actual earnings of the system.

If there is anyone in the bargaining unit left in Tier 1 that is still eligible to retire on money match, this change will have a negative impact on the value of their benefit. This change will not go into effect until 1/1/18 so if you are Tier 1 considering retiring on money match, you should take some time to evaluate your retirement position before 1/1/18. The actuaries have advised the PERS board, however, that a money match member will have to work an additional 4 months to recapture the full value of the benefit that would be lost if they retired after 1/1/18.

For OPSRP and full formula members, we are told this change should have no substantial impact on their benefits. 

We are not accountants, actuaries, or retirement experts. For questions about your retirement position please contact PERS or your retirement professional.

Blog Categories